ATHLETIC FOOTWEAR

COMPETITIVE
ADVANTAGE
Increased Revenues Better Negotiability Wider Presence
• Mercury's revenues to • Mercury's existing • Mercury's established
roughly double existing infrastructural ability to network with
sales adapt quickly department stores and
retailers
• Increase growth • Offer longer production
rates through growing runs to manufacturers • Allows to compete
popularity of extreme and thereby against big box retailers 
sports Improve position to
reduce pressure from
suppliers
 CASE OVERVIEW
John Liedtke, head of the business development for Active Gear, Inc is considering a potential opportunity to acquire Mercury
Athletic, the footwear division of West Coast Fashions, Inc. . Liedtke is evaluating the company to assess whether the future
benefits justify or surpass the present value of the investment in Mercury.

Overview of Active Gear Inc and Mercury Athletic

Active Gear Inc. Mercury Athletic
• Small portfolio with longer lifecycles • Mid-Range priced footwear with contemporary fashion
Products • Athletic Shoes that have a classic image orientation
• Casual shoes that have classic styling • Athletic and Casual footwear for men and women

• Affluent urban and suburban family members in the • People in the global youth culture of alternative music,
age range of 25 to 45 years TV and clothing
Customers • Active Gear is associated with upwardly mobile • Typical customers were extreme games enthusiasts in
lifestyle the age group of 15-25 years
• Sold products through Department and Speciality • Products were sold primarily through an extensive
Distribution Stores range of Retail, Department and Speciality Stores
• No big box retailers were involved in distribution • Discount Retailers were also involved in distribution

• $470.3 million revenue in the year 2006 • $431.1 million revenue in the year 2006
Revenues • 58% revenue from casual footwear and 42% • EBITDA reported in the year 2006 was $58.1 million
revenue from athletic footwear